The analyst company said that strong sales in the fourth quarter across all price points and markets drove smartphone sales to record levels.

Smartphone vendors shipped a total of 399.5 million units during the fourth quarter of 2015 (4Q15), resulting in 5.7% growth when compared to the 377.8 million units shipped in the last quarter of 2014. For the full year, the worldwide smartphone market saw a total of 1432.9 million units shipped, marking the highest year of shipments on record, up 10.1% from the 1301.7 million units shipped in 2014.

IDC noted that while market leaders Samsung and Apple both saw growth in shipments, they face increasing competition from Huawei, which posted year-on-year shipment growth of 44.3%, and became only the fourth ever vendor to ship over 100 million smartphones in a year.

"Usually the conversation in the smartphone market revolves around Samsung and Apple, but Huawei's strong showing for both the quarter and the year speak to how much it has grown as an international brand," said Melissa Chau, Senior Research Manager with IDC's Worldwide Quarterly Mobile Phone Tracker. "While there is a lot of uncertainty around the economic slowdown in China, Huawei is one of the few brands from China that has successfully diversified worldwide, with almost half of its shipments going outside of China. Huawei is poised to be in a good position to hold onto a strong number three over the next year."

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Apple continued to dominate headlines in the quarter as Q4 15 represented its most successful quarter yet with 74.8 million units shipped, up 1% from the 74.5 million shipped last year. Although the Cupertino-based vendor witnessed minimal growth year over year, its 2015 total market share climbed to 16.2%, up from 14.8% in 2014. Growth in key markets such as China were up 18%, in which 50% were first-time iPhone owners. Sales in many emerging markets were also up as India saw the biggest increase among the BRIC countries with 76% growth. Apple accomplished all this despite the increase in average selling price (ASP) for an iPhone. ASPs climbed to $691, up from $687 one year ago, potentially pointing to increased demand for a larger screen and higher capacity models.

"With initial Apple shipment estimates all over the map, Apple assured the public that demand for its premium smartphones is still alive and kicking," said Anthony Scarsella, Research Manager with IDC's Worldwide Quarterly Mobile Phone Tracker. "A new record-setting quarter for Apple indicates consumers continued demand for Apple's latest offerings regarding upgraded hardware and software. Features such as a more widely accepted Apple Pay, increased performance, and the innovative Force Touch technology, continue to set the iPhone apart from the competition.

"To combat Apple at the high-end, competing vendors will need to bring value to consumers to stay relevant in the market," added Scarsella. "With heavy saturation in many mature smartphone markets such as the US, Europe, and China, many vendors have placed a renewed focus on pushing premium-looking mid-tier devices as a new value proposition to consumers in both developed and emerging markets. Samsung has found success in this segment with its A-Series, and Huawei with its Honor brand. We expect similar devices to appear in 2016 from a variety of vendors that will focus on affordable value without neglecting performance and aesthetics."

Samsung was the leader in smartphone shipments for 2015, with 324.8m devices sold, marking a 2.1% increase from the previous year. Apple shipped 231.5m units, a yearly increase of 20.2%.

Huawei showed year-on-year growth of 44.3%, shipping 106.6m smartphones in the year. Lenovo grew shipments by 24.5%, to 74m units, while Xiaomi sold 70.8m devices, a growth of 22.8%.